Branch Today, Gone Tomorrow

King, best-selling author of Bank 2.0 and founder of Movenbank, believes financial institutions making any further investment into the brick-and-mortar channel are wasting their time, energy, resources and money.

In King’s latest eBook, Branch Today, Gone Tomorrow, he asserts his unwavering belief that the complete and utter death of all bank branches is coming soon… if it hasn’t started to happen already.

“There is still considerable effort expended today in retail banking, arguing for saving as much of the branch function as possible,” King writes. “The more we keep arguing about the branch being at the core of the ‘bank’ or at the core of the relationship, the less effort we put into truly transforming the way we work with customers.”

In recent years, King has developed quite a reputation in the banking world for his ultra-bullish outlook on digital channels. He is frequently revered as a disruptive force within the financial services industry, asserting a bold, sometimes controversial perspective while he beseeches, dares and occasionally scolds banks to pursue more innovative strategies.

“The destruction of the physicality of banking from branches, checks, cards and cash will all be attributed to the emergence of the iPhone.” — Brett King, Author

King’s central argument is largely framed around themes of obsolescence. King says the banking industry faces a fate similar to what happened in telecommunications, where dinosaurs that once dominated get replaced by new players touting new technologies. To illustrate this point, he draws an analogy with mobile communications providers who pushed aside traditional phone companies who themselves had rendered telegraph operators obsolete.

“Traditional players are not afforded any protection by means of their existing infrastructure or distribution model when a new and improved core technology emerges,” King says.

King offers the meteoric rise of internet banking as testimony. He sees the explosive growth of online banks like ING Direct and Ally as an omen signaling the impending channel shift for which bankers seem so unprepared.

Inasmuch, King’s most recent book could be interpreted as a prophetic warning to the worldwide banking industry, with the main message being “evolve or die.”

As evidence of the all-digital future urgently requiring banks’ attention, King reminds us of the tectonic technology shifts that have reshaped society. Bookstores, video stores, music stores — all but extinct thanks to the internet. And who buys encyclopedias anymore? No one. Everything, King reasons, is headed online and going mobile. That includes banking.

“My kids may never actually need to physically enter a branch by the time they are in college or in the workforce.” — Brett King, Author

“Waiting to deploy a mobile solution until 2014, seven years after the first iPhone’s release?” King asks incredulously. “That’s unimaginable in today’s environment.”

“Mobile banking is being adopted 300% to 500% faster than internet banking was adopted,” King points out.

If King’s vision of the future ultimately materializes — a world dominated by mobile financial apps — he believes credit will rest solely on the shoulders of Apple’s Steve Jobs.

“The destruction of the physicality of banking from branches, checks, cards and cash will all be attributed to the emergence of the iPhone,” he confidently asserts.

But when will all this happen? King says soon.

“My kids may never actually need to physically enter a branch by the time they are in college or in the workforce.”

True, King’s kids may never have to use a branch? But what if they choose to? Maybe there will always be some segment of the population who feels more comfortable discussing significant financial matters in person?

Only time will tell if King is right. Fortunately, the wait shouldn’t be long.

King’s book, Branch Today, Gone Tomorrow, is available in Kindle format at Amazon.com for $8.69. King is an intelligent guy and skilled writer, making his books good reads and a pleasure to review. You can also pick up King’s other book, Bank 2.0, at Amazon.

Thank you for this post and citing Brett’s great book. As financial institutions continue to seek new revenue streams in a world with a smarter and more empowered consumer, not to mention more regulated, the delivery system must be re-evaluated. While I don’t go quite as far as Mr. King does and pretty much predict the complete demise of the bricks and mortar branch, I do think the branch will continue to decline in importance, and banks and credit unions must re-align their delivery system to be relevant to a different kind of consumer.

Bottom line is – financial insitutions must know their markets, their customers and how these have changed, and will continue to change. They will then be prepared to make some different strategic choices for how to serve their customers and remain relevant.

Thanks for a wonderful review, and glad you enjoyed the read. My objective with Branch Today was pretty clear – let’s stop trying to defend branch networks as essential and start working purely on working out the best ways to serve customers day-to-day. Often the pure scale of investment in branch networks biases retail FI brands to keep ‘propping-up’ the network, but if you look at behavior and the trends, that that’s a very risky and cost-laden strategy. A more balanced view is a must if FI brands are going to make an orderly transition to the next iteration of banking.

“‘My kids may never actually need to physically enter a branch by the time they are in college or in the workforce.”

True, King’s kids may never have to use a branch? But what if they choose to? Maybe there will always be some segment of the population who feels more comfortable discussing significant financial matters in person?”

My feeling while reading the entire post was exactly this. What about the people who are more comfortable walking into their local branch and handling some items? What about safe deposit boxes and their functionality? etc.

I agree that technology will change many things about banking, but to put forward the idea that all branches are soon to be shuttered as a result of a behavior change seems to go to far.

We have started launching ‘Banking Beyond Branches’ in Malaysia, an branchless banking concept by appointing agents from local people providing selected financial services such as deposit, withdrawal, bill payment and cashless payment to the rural areas.

The author ignores a few facts, many customers don’t have bank accounts period, and two , up to a third of many small businesses in a location, are “cash only” such as restaurants,
of course the growth of online banking, check image processing,
etc has almost eliminated the need for a branch, at you have the atm, but it still is relevant,but what banks need to do, is refocus their efforts and why the branch is there, branches should not duplicate online or just exist , it should focus
on services that cannot be easily done online, many branches are still simple and don’t seem to have much technology, a super branch with tv’s and podcasts may help but it seems window dressing, in addition bank branch staff may not have specialist available in other bank sectors which defeats the purpose of being able to talk and banks always try to sell.